Last week the Supreme Court told the Federal Appeals Court that it needs to reconsider its ruling in WildTangent, Inc. v. Ultra- mercial, a patent infringement battle that relates to seeing paid advertisements before viewing or using copyrighted material online. Business leaders like Google and Verizon have sided with WildTangent on this one, as well as the Electronic Frontier Foundation. The tech industry is also watching this case very carefully because it could signal an end to patents with weak definitions or general software ideas or techniques being awarded easily.

The lawsuit revolves around Patent No. 7,346,545, which was awarded to Ultramercial in 2008. The patent attempts to lay claim to the technique of letting a consumer view a commercial in lieu of payment to gain access to copyrighted content such as videos or video games. YouTube and Hulu settled patent infringement claims by Ultramercial, but the company went ahead with suing online game maker WildTangent.

Last week, the U.S. Supreme Court decided to set aside an earlier ruling by the U.S. Court of Appeals for the Federal Circuit that had allowed Ultramercial’s patent lawsuit against WildTangent to move forward. The high court told the federal circuit to reconsider its decision.

“This is really important for the development of commerce, social activity and basic innovation on the Internet going forward,” said Julie Samuels, a staff attorney with the Electronic Frontier Foundation, told Politico. The EFF filed a brief alongside the Computer & Communications Industry Association and Red Hat in support of WildTangent.

Google and Verizon filed their own brief in support of WildTangent arguing that the federal circuit’s decision threatens technology and software innovations by allowing patents that cover abstract ideas.

We will have more on this story as it develops. Patent reform would certainly help in quelling the extortion that some (but not all) patent holders use to extort money from other companies or stifle competition.

As long as biomedical and banking make up the bulk of our GDP, we are unlikely to see much change in patent law. We tend to forget that the tech lobby (outside telecoms) is very weak and disorganized, but even if it got stronger those two other industries have massive inroads that are hard to compete with.